NEW YORK, March 26 (IFR) - Latin American credits ended Thursday’s session mixed after US Treasuries reversed earlier gains and oil prices jumped as much as 5% on fears of increased instability in the Middle East.
While Brazil’s five-year sovereign credit default swap closed flat at 280bp-290bp, bonds issued by the country’s state-owned oil company Petrobras experienced another day of volatile trading.
Its curve ended some 10bp tighter after widening as much as 12bp in early trading, leaving the 2024s closing at around 530bp-535bp.
Elsewhere, price action among other oil-related credits was also mixed despite a strong rebound in crude prices after Saudi Arabian air strikes in Yemen sparked fears of potential disruptions to crude supplies.
Venezuelan bonds rose by as much as 3/4 of a point in early trading to end the day just 1/4 higher amid low liquidity. But the 2025s issued by Mexican state-controlled oil company Pemex fell 1/2 a point to end at 99.875-100.375, though spreads were tighter due to the move wider in US Treasuries.
Trading activity in high-yield corporates was particularly subdued, with the exception of Brazilian telecom company Oi, which saw its notes drop by as much as four points.
The company’s 2020s were last quoted at a cash price of around 85, while its 2022s were spotted at around 78, said the trader, who attributed the move to fears about the upcoming earning results.
ColTel’s new hybrid bond, meanwhile, was ending its first day of trading up half a point from par reoffer, after underperforming slightly in the gray market on Wednesday.
Elsewhere in the region, clearing houses Euroclear and Clearstream have closed trading bridges on some US$9.4bn of Argentine bonds issued under local law, a source familiar with the situation told IFR on Thursday.
The action will prevent Euroclear customers from settling their trades with Clearstream clients and vice versa, but will not affect trading between customers belonging to the same clearing company, the same source said.
Mexican media company TV Azteca is looking to pull the trigger on a rare project bond related to the development of Peru’s fiber optic network as soon as Tuesday.
The senior secured notes will be backed by project cash flows and will be issued by special purpose vehicle Red Dorsal Finance Limited.
Final maturity will now fall in 2031, as opposed to the 2032 originally stated in the preliminary prospectus, while average life will be around 9.5 years. BESI - Grupo Novo Banco and Credit Suisse are the bookrunners on the deal. (Reporting by Davide Scigliuzzo; Editing Paul Kilby)